updated 6:21 PM CEST, Sep 22, 2020

UK FATCA challenger 'Jenny' latest: Request to HMRC to waive 'adverse party costs'

Lawyers acting on behalf of the U.S.-born FATCA complainant known as "Jenny", who had been considering whether to go ahead with a challenge to the UK’s Information Commissioner’s Office's May 29 decision not to uphold her crowd-funded complaint over the way her personal data has been sent to the U.S. by British entities in recent years, have formally requested that HM Revenue & Customs agree to waive any so-called "adverse party costs", in the event that Jenny were to go ahead with her challenge – and lose.

News of the letter of claim having been sent to HMRC came on Friday, three months to the day after the ICO's decision, and the date by when Jenny had been obliged to say whether she intended to go ahead with a "judicial review" of the ICO's decision.

As reported, Jenny had been hesitant to go ahead with a challenge in the matter because the cost, were she to lose, could be prohibitively high. This is because under UK law, she could find herself having to pay significant fees on behalf of the defendant in the matter – in this case, the UK's tax authority, HMRC.

Although crowd-funding enabled her to get as far as she did in bringing her challenge, the possible need to pay any "adverse party costs" if the judicial review were to also go against her – even though she says she has reason to be hopeful that it wouldn't – makes it too risky, given the size of her current warchest, to go ahead without an agreed waiver in advance of the adverse party costs obligation, she explains.

"The strength of our arguments, and evidence going into court to appeal the ICO’s decision, are not in question," she says, in a statement on her crowdfunding page.

"The question has been one of funds. The inability to bring the ICO's ineptitude before the English courts would be a huge hit for us, and a real tragedy for everybody who has been, and will be, affected by FATCA’s disproportionality." 

(As of this today, Jenny has £91,774 with which to make an appeal against the ICO’s decision, well short of the £156,000 she has set as her goal for going ahead with her challenge.)

According to Filippo Noseda, the Mishcon de Reya LLP partner who has been handling her case, HMRC has 14 days to respond to Jenny's request. 

"If they turn down the request, in respect of adverse party costs, we would need to ask people to take a hard look in the mirror, and decide whether they want to make this happen or not," Noseda added.

Potential game-changer

One reason Jenny says she’s reluctant to walk away from the ICO case, in spite of the financial risk it would pose for her if she fails to raise the money she’s told she needs, is because a European Court of Justice decision on July 16, in a well-known and closely-watched privacy case known as “Schrems II”, is seen as a potential game-changer for her and other FATCA challengers in Europe.

As reported, the Schrems II ruling struck down the so-called “Privacy Shield”, the main mechanism used by the EU to protect the personal data of EU citizens when it's transferred to the U.S.

The case was originally brought more than five years ago by 30-something Austrian national named Maximilian Schrems, in the form of a legal complaint about the way Facebook had been sending his personal data to the U.S.

Immediately after the ECJ issued its Schrems II ruling, Noseda and others, including experts quoted in stories published by such media organizations as The Economist and Bloomberg, described it as a "potential game-changer".

The Bloomberg article, in fact, which was dated Aug. 18, bore the headline “EU privacy law offers hope to Foreign Account Tax law critics”.

In its article, The Economist noted that Jenny’s case “could end up at the ECJ” providing it got there by the end of this year, when the transition period for Britain’s exit from the EU ends.

Meanwhile, as Noseda and other data protection experts have pointed out, the ECJ ruling also came on the heels of a series of major personal data breeches in Canada, Germany and elsewhere, suggesting, they say, that the data protection regulations currently in use are in need of urgent review at the very least. 

To read more about Jenny's campaign and to make a contribution on her CrowdJustice.com page,  click here.